Perspectives Blog

Yellen at Jackson Hole

Zach Pandl, Portfolio Manager and Strategist | August 25, 2014

…(1) to what degree does the unemployment rate understate slack? and (2) what does that mean for the FOMC’s exit timing? On these questions we saw three important elements in Yellen’s remarks: First, her description of current trends in the labor market and cumulative progress toward recovery was clearly upbeat. In the opening paragraph she noted the faster pace of payroll growth this year compared to previous years, the fact that payrolls now exc…

Ahead of the trends – Washington update on retirement savings initiatives

Columbia Management Learning Center , | July 31, 2014

Various federal government initiatives, including tax reform, will impact the way Americans save for retirement. Trends to watch include enforcement, pension de-risking and participant empowerment measures. Staying current on changes can help you identify critical retirement savings decision points. Retirement security is the financial issue that is most disconcerting to Americans.* Likewise, the current administration has concluded the U.S. i…

U.S. rates — View update

Zach Pandl, Portfolio Manager and Strategist | April 4, 2014

…ed up, and is now four tenths above its level in December. Average hourly earnings growth also slipped to 2.1% year-over-year. However, we would caution against reading too much into a single jobs report. Based on demographic trends, we estimate that “breakeven” payroll growth—the amount needed to lower the unemployment rate—is around 75-100k per month. If job growth continues around 200k per month, it’s very likely the unemployment rate will kee…

Missing links and multipliers

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | June 9, 2014

…h student debt. This was underscored recently by a New York Fed study* which showed that young people with student loans were much less likely to invest in houses than those without loans, which is a reversal of pre-recession trends. They believe this is one reason why the housing recovery has not been stronger. When you restrict credit in the midst of a 100 basis point rise in interest rates and a 13% jump in home prices, affordability is invari…

India’s new government fires investor enthusiasm

Natasha Ebtehadj, Fund Manager, Threadneedle International Limited | September 8, 2014

…ent also exacerbated the slowdown. A mixture of several major corruption scandals and political deadlock under coalition politics resulted in several years of policy paralysis. Much needed action to spur investment and tackle structural supply-side bottlenecks in inflation and infrastructure was simply stuck in government. Landslide victory for BJP brings in strong government Summer 2013 proved to be an inflection point for the market with the ec…

Retail sector outlook – It’s a share game

Mari Shor, Senior Equity Analyst | March 17, 2014

expenditures) versus non-durables. Even within non-durables categories, the ongoing spending shift towards accessories and away from apparel can be expected given less favorable weather through summer, less democratic fashion trends in the marketplace and a lack of seasonality in consumers’ wardrobes. With both structural and cyclical headwinds facing many apparel retailers today, we believe that global brand strength and supply chain expertise w…

Slack and inflation

Zach Pandl, Portfolio Manager and Strategist | July 21, 2014

Today’s low unemployment rate indicates modest slack in labor market, which implies earlier Fed rate hikes and/or more inflation risk. The decline in labor force participation in recent years now looks mostly structural. Investors should remain cautious around U.S. interest rate risk despite a solid first half of 2014. Excerpted from Zach Pandl’s newest whitepaper Structural weakness in labor force participation means there is less slack in th…